At Samsung, the global AI boom has spurred a looming strike and deep divisions

A looming 18-day strike at South Korean chip giant Samsung that has triggered worries within the government, rattled foreign investors and threatened global supply chains rests on one crucial question: who should share in the spoils of the AI boom?

More than 45,000 workers are threatening to stage the largest strike in the conglomerate’s history from May 21, reducing production of memory chips that are crucial components in AI data centres, smartphones and laptops, as Samsung and its union struggle to find a compromise over bonus payouts.

Samsung Electronics, which has reaped huge profits from a global memory shortage, has offered to pay generous bonuses to staff. But it wants to give 27,000 memory chip employees at least six times more than its other workers in its logic chip design and manufacturing businesses.

“If the memory division gets 500 million won while the foundry division only ‌gets 80m won, ⁠what motivation would those employees have to keep working?” said union leader Choi Seung-ho during negotiations, according to the transcripts.

Some workers said an exodus was already underway. A worker who identified himself by his surname, Lee, a foundry engineer in Pyeongtaek, said his team has shrunk sharply in the past couple of years as some of them moved to Samsung’s memory division and SK Hynix.

Two other employees who declined to be named said many of their colleagues are currently applying for jobs with SK Hynix and other companies. SK Hynix did not provide an immediate comment.

The union’s demands include requests for Samsung to abolish a bonus cap of 50pc of annual salaries and allocate 15pc of annual operating profit to a bonus pool distributed to workers.

Samsung negotiators say performance bonuses should be paid out according to merit.

“They, the logic chip business, posted losses in the trillions of won and ​honestly, if it had not been for our company, they probably ​would have gone out of business or closed down,” said Samsung ⁠executive and negotiator Kim Hyung-ro, according to the transcripts. “So how can you justify giving performance bonuses?”

“The company still has faith in this business and continues to invest consistently in facilities — and in reality, those investments are being funded with money earned from the memory business.”

In a statement, Samsung said “the logic chip business is a strategically significant business which we have continuously invested in, guided by our long-term vision.”

“Samsung Electronics will offer its ​employees the best compensation in the industry” with the latest proposal, it said.